London’s Build to Rent (BTR) sector could be given greater flexibility in bringing new developments forward under proposed changes to affordable housing policy contained within the new draft London Plan.
Published by the Mayor of London, the draft plan sets out the capital’s planning framework for the coming decades and proposes a revised approach to affordable housing thresholds, reflecting significant differences in development viability across London.
For BTR developers and investors, the proposals are potentially significant. The draft retains a dedicated Build to Rent policy, while changes to the wider affordable housing threshold approach are intended to provide a more flexible route for residential schemes in locations where viability has become increasingly challenging.
Rather than applying the same Fast Track affordable housing threshold universally, the proposed system would allow thresholds to vary between different parts of the capital according to development values and viability. The Mayor’s strategic ambition remains for 50% of new housing to be affordable, but the percentage required to qualify for the Fast Track planning route could differ by location.
The intention is ultimately to move the threshold back towards 35% from 2028 in as many boroughs as possible, with different thresholds applying elsewhere where viability evidence supports a more flexible approach. Boroughs could subsequently move between bands as market conditions improve.
For London’s BTR market, greater flexibility could help unlock developments that have struggled to progress amid higher construction costs, financing pressures and viability challenges.
The changes could also have implications throughout the built environment supply chain. A stronger pipeline of viable BTR projects would support opportunities for architects, planning consultants, contractors and engineers, as well as specialists in façades, M&E, fit-out, landscaping and public realm.
BTR has become an increasingly established component of London’s residential market, bringing institutional capital into the delivery and long-term management of purpose-built rental homes. The existing London Plan already provides a specific planning framework for BTR, including requirements around unified ownership and management and affordable rental provision.
The new proposals should not yet be regarded as settled policy. The draft London Plan is currently undergoing public consultation until 15 October 2026 and will subsequently face an independent Examination in Public, with final adoption currently expected in early 2028.
For developers, investors and construction teams considering future London BTR projects, however, the direction of travel is important. A more location-sensitive affordable housing framework could provide greater certainty and flexibility, potentially helping more residential schemes move from planning and viability assessments into construction.
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